Applying PE ratios to ETH doesn’t really make sense since it isn’t an equity and token holders don’t receive protocol “earnings” the way shareholders do. Network fees and burn aren’t corporate profits.
Also, dollar price targets ignore USD debasement and global liquidity expansion. A $250 ETH in 2020 dollars isn’t the same thing today.
If BTC doesn’t need cash flows or PE metrics to justify its value as a monetary asset, it’s inconsistent to force ETH into a stock valuation model while exempting BTC. Crypto prices are driven by network effects, monetary premium, adoption, and liquidity cycles — not just revenue multiples.
I think we are actually pretty much aligned on ETH's use and potential.
However, I would say you do value an income earning protocol exactly as you would a security. You look at revenue, costs, dilution and/or burning of the token, and then extrapolate for the estimately likely life of the business, and taken into account moat/competition. Whether you call ETH a "security" or not, this is the fundamental basis of all asset valuations, and what, over the long term, the market will eventually gravitate to.
The problem with most crypto when launched (and indeed any "hot" company or tech start-up / IPO), is that investor enthusiasm hyped up by marketers etc, WAY overvalue the asset. Where I come in, is that I buy things at fair or below value. Like Buffet. Sometimes I miss the boat as a result - eg, I missed Google at the IPO thinking it was overvalued. I for many years missed Amazon and MSFT (I have all now, but bought later than in hindsight I wished I had).
So, in any case, using my valuation methods, ETH comes in at $250-500 per coin (and that is valuing it as a high growth tech-type stock). Obviously if the USD devalues, the value of any asset measured in USD would increase in the inverse direction - that applies to all assets.
BTC I would put into another category entirely - it has no "earnings" and its sole utility is that of being the ultimate and perfect global ledger for economic energy. So, BTC really either has almost infinite upside, if it really continues to be adopted to serve this function, or it gtravitates to zero. Its ultimately binary, one way or the other. Its totally different for ETH, and many other revenue generating protocols. For each of them, in a long run, their value is measured by their earnings (and that can be "distributed", either by payouts, issuing more tokens or staking, or by burning - akin to a stock "buy-back". But ultimately, if no revenue, or if revenue exceeds costs, such tokens all must go to zero. On the other hand, if such metrics are positive, their value will be reflected by how that revenue (for all the risk taken), compares with a risk free rate of return on cash (eg US Treasury yield).
